If you are able to increase the net asset value (NAV) of your property - continuously – would you be interested?

"…Malaysia and Singapore has enjoyed an upbeat property development scene for the last two years. What's more, this trend is strongly poised to continue in both the countries for the years to come. Nonetheless, a majority of developed properties mainly commercial assets are tormented from below par asset evaluations and poor occupancy rates. Inconsistent rental incomes and further drop in occupancy rates are forcing property owners and facilities managers to take it up a notch..."

The well-being of a particular asset or property in Malaysia and Singapore is directly contributing to the additional income for owners, investors and businesses within the area. Real estate investment trust (REIT), net asset value (NAV) and adjusted funds from operations (AFFO) do not remain to become buzzwords within the market and to investors in both the countries. The solution that should be given serious consideration is the integrated facilities management (IFM) practices within these properties and assets.

In business, facilities management is the management of buildings and services. The services are sometimes considered to be divided into "hard services" and "soft services". Hard services include such things as ensuring that a building's air conditioning is operating efficiently, reliably, safely and legally. Soft services include such things as ensuring that the building is cleaned regularly or managing the performance of contractors (e.g. electricians, builders).

The term "facility management" is similar to "property management" but often applied only to larger and/or commercial properties where the management and operations is more complex. Integrating such soft and hard services using a single point of contact actually allows a building owner to indulge and enjoy the full benefits of Integrated Facilities Management (IFM).

Successful facilities management requires a holistic, performance based approach to building automation and operation and tracking of key performance metrics in real time. Effectively performing such activity will enable energy savings of between 20-30 percent in buildings and properties upholding IFM practices. The lack of integration between control systems in buildings today is a main inhibitor to optimized facilities management. Many facilities managers continue the tradition of considering facilities management as a series of unrelated functions. Consequently, building control systems typically operate independent of one another and suffer from an inherent lack of functionality, which significantly limits the company's ability to optimize facilities management.

Since integration and energy management is vital in today's facilities management, many building owners tend to favor third party providers to either manage or take up the entire responsibility. Large third party facility management players have various capabilities to optimize building performance and lower operational cost. Operating a building at lowest costs while maintaining or increasing the value of the building is the ultimate goal when integrated facilities management is applied.

"…Often companies battle with the idea of whether to outsource non core activities to third parties. One could argue both ways; however, it is beyond doubt that facilities management services have brought definitive benefits to businesses and facilities alike across the globe…"

Core Business Objectives: Facilities management services provide the tools to optimize people, process, assets and the work environment to support delivery of a core business objective. From operations management, capital asset management and project delivery management; IFM is the key to ensure a particular tenant or business owner in a premise can work on its core business objectives.

Controlling Costs: Maintaining a property/facility and planning both predictive and preventive maintenance activities can be a tool to control overheads and value of a particular property/facility. Occupancy rates will increase through the reliability demonstrated from these buildings.

Reputation and Value: The reputation of a particular property will eventually translate into value; good reputation, appearances, functionally, location and automation level of a particular building or asset will translate into higher net value.

Convergence of Networks, Machines, People and Systems: In this morass of human networks corporate real estate is becoming more integrated with other business functions because companies see that the way a workplace is designed can create relationships between people. It can have a very concrete impact on worker retention, productivity and the ability to inspire profit generating ideas.

"…Our decision to outsource facilities management has helped our Property Department to focus on core activities by dealing with a single point of contact, rather than being bogged down by day-to-day maintenance This initiative has resulted in cost savings and improved operational efficiency…"

"…the third party facilities management services market in Singapore has been a bit shy of being almost double the size of the market in Malaysia. While Singapore is ahead in the game and is reaping several benefits as offered by integrated facilities management services, Malaysia offers tremendous room for growth to service providers...."

As both the countries project an increase in third party IFM penetration; it's noted that steady growth is poised for the two countries in years to come. Strong government support and push to outsource facilities management is prevalent in both Malaysia and Singapore. Other drivers like the REIT market and further corporate restructuring is backing the idea of outsourcing facilities management in Singapore. The market in Malaysia is soon to push such drivers and create an even larger market locally in due time.

The level of awareness is comparable between both countries but market penetration still remains high in Singapore. Less bureaucracies and other formalities in Singapore is helping the growth of IFM compared to Malaysia. Nonetheless, such restraints and challenges are slowly fading away as maintenance issues seem to be the center of attention for both countries.

Real estate investment trust (REIT) is set to grow further both in Malaysia and Singapore. Once again Singapore is benefiting from a REIT market worth more than 20 times greater than that in Malaysia. The Singaporean integrated facilities management services market naturally is far greater; as long as the rental properties are well managed, the rental markets are stable and the rental incomes are consistent, property owners and investors can get consistent dividend incomes. If REIT's are bought at a good price; consistent return on investment is natural even with fluctuations in the stock market.

Currently, multinational corporations operating in both Malaysia and Singapore typically have global contracts on facilities management; such practices allow third party management companies to work on economies of scale when handling these properties.

The next step is realization for the cause: once again all parties including government initiatives should be geared towards adopting IFM practices. Since there is certainly a good platform, results and reasonable awareness levels about facilities management; the commercial sector especially in Singapore should be able to adopt the trend faster. Cognizant managers should realize the direct benefits of integrated facilities management as potential tenants and investors respond better to properties or buildings with better track record and market value.

To conclude, Integrated Facilities Management should be an assignment for all buildings owners and those revolving around property management in both Malaysia and Singapore. The real worth of a building will prevail and continuously increase in value when managed using integrated facilities management. It is never too late to get a building or property under integrated facilities management services to minimize energy consumption and operating costs. Although both Malaysia and Singapore have experienced drastic changes over time in favor of facilities management; there is still the question of integration.

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best in class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best practice models to drive the generation, evaluation and implementation of powerful growth strategies. Frost & Sullivan leverages over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 31 offices on six continents. To join our Growth Partnership, please visit http://www.frost.com.

Media contact, please email djeremiah@frost.com or carrie.low@frost.com